Monterey Park City Council considering utility rate hike

MONTEREY PARK >> The City Council will vote on a six-month-long process Wednesday that may increase water, sewer and trash rates effective Sept. 1.

The city needs to collect between $3.4 to $9.4 million more a year to repair, replace and rehabilitate a water system that dates back to 1929. About 72 percent of the transmission and distribution systems were constructed before 1960.

“When it comes to water and sewer, we’re the utility that serves that,” City Manager Paul Talbot said. “We have not kept up with where we should be. We can’t wait any longer … We end up with sewage leaks. We end up with water breaks, or we don’t have sufficient water pressure to certain parts of town.”

Water, sewer and trash rates have been static since October 2009, though adjustments tied to inflation have been made, said Chu Thai, management and services director. The potential price increase range has yet to be set.

The rate increase is a separate issue from utility users taxes, an issue a group of volunteers associated with the National Tax Limitation Committee has criticized as an added resident cost created from a city’s inefficient fiscal management. Monterey Park does not have immediate plans to increase its UUT, which is set at 3 percent for residents and 5.5 percent for commercial property.

Athens Services provides trash pick-up, but a projected $1 million net loss in the refuse fund for this fiscal year supports the need to increase the rate by 15 percent, according to a staff report.

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The city needs to adjust pricing to the sewer service charge to pay for a $12.8 million Sewer Capital Improvement Program.

“The study shows that current sewer cost for the average resident is $1.86,” Thai said. “That’s much lower than what other cities are paying. If you spread $1.86 over 30 days, that’s 6 cents a day to flush your toilet. That doesn’t seem right.”

Alhambra, South Pasadena, Azusa, Downey and Whittier all have a higher average monthly sewer bill. Whittier is the second cheapest, and they pay $7.06 on an average month, according to a staff report.

Some 95 percent of Monterey Park’s water comes from the city, and residents pay an average of $28.82 per month, according to a staff report. In a comparison with five other suppliers, Covina has the second most inexpensive per month, and it is $1.89 more expensive than Monterey Park. The highest monthly price in the sample came from the San Gabriel Valley Water Co., which averages $55.31 for a single-family home.

Cost for emergency replacements is two to four times more expensive because of the damage the explosions do to surroundings, Thai said. In 2011 there were 34 breaks that cost the city from $272,000 to $544,000 in emergency repairs, he said

“Until the City of Monterey Park can adequately collect enough water revenues, we are left with only enough money to respond to emergency repairs,” Thai said. “Setting the proper water rates will allow the City to move from a costlier, reactionary operation to a cost-effective, preventative water system.”

Some wastewater pipelines were installed more than 100 years ago and are 50 years beyond their life expectancy. Because only 35 percent of the sewer lines have been inspected, the cost of the project and the rates will likely be increased in the future, Thai said.

Once the city sends out notices of the proposed services hike, residents will have at least 45 days to write an opposition letter to City Hall. According to a tentative schedule, Monterey Park will mail the notices on April 25. At least 8,180 residents, 51 percent of affected tenants, must submit protest letters by June 18 if voters wish to stop the rate increases. Otherwise the City Council will be able to decide on the issue.